Oil steadied in Asian trading as fading hopes for more fiscal stimulus before the U.S. election offset optimism driven by an increase in Chinese crude imports last month.
Futures in New York traded near $40 a barrel after closing up 2% on Tuesday. U.S. stocks settled lower after House Speaker Nancy Pelosi rejected a proposal from Senate Republican leader Mitch McConnell for a smaller-scale approach to a new stimulus and demanded a revamped offer from the White House. A stronger dollar also diminished the appeal of commodities priced in the currency.
Chinese oil imports rose 2.1% month-on-month in September, official data showed Tuesday. The buying revival by the world’s largest crude importer is a rare positive as a resurgent virus threatens an already tepid demand outlook.
The Organization of Petroleum Exporting Countries trimmed estimates for the amount of crude it will need to pump in the coming year, days before ministers are due to assess the impact of supply curbs. Saudi Arabian Crown Prince Mohammed Bin Salman and Russian President Vladimir Putin urged the OPEC+ alliance to stick to agreed production cuts, according to a statement from the kingdom, increasing pressure on other members to reduce output.
OPEC said it will need to pump 27.46 million barrels a day this quarter to meet global demand, 900,000 barrels less than its estimate in September. The group sees a rise in non-OPEC supply, mainly from the U.S. Global oil demand will drop 8% this year and probably won’t get back to pre-virus levels until 2023, the International Energy Agency said Tuesday.